Of the 12 major A/E/C markets measured by the QMF, healthcare topped the field with an overall NPMI of 27%, followed closely by water/wastewater (24%). After that, the dropoff was sharp, with transportation taking the bronze (7%), followed by energy/utilities (1%) and environmental (-5%).
The worst performing markets were both commercial – developers (-51%) and users (-47%). By contrast, healthcare’s NPMI led the previous quarter’s results at +55%, while education trailed the pack at +23%. “Close analysis of proposal activity reveals very sharp divisions in outlook by markets, some plummeting to levels not seen since the Great Recession.” said PSMJ Senior Principal Davis Burstein, P.E., AECPM.
Among the 58 submarkets tracked, only 20 showed positive NPMIs. Healthcare submarket medical labs reported the highest level of activity at +27%. Predictably, the restaurant submarket performed worst (75%). Multifamily housing, which has consistently displayed some of the strongest activity in the past decade, was relatively flat (-2%), while other housing markets such as condos (-28%), single family developments (-28%) and single-family homes (-31%) slumped badly.
“I expect to see a rapid rebound in housing and commercial development once the health crisis passes and the impact of record-low interest rates starts to be felt,” adds Burstein. “Pent-up demand should make its presence felt by the end of Q3, and even more so in Q4 if we see movement on an infrastructure bill.”